What does the insurance tax hike mean for you?

October 30, 2015 | 7years | Insurance News

In just a few days' time, the cost of insurance will begin to edge up as the insurance premium tax (IPT) hike comes into force. But just what's happening, and what will it mean for you and your finances? We take a closer look.

Will you be affected?

In a nutshell, probably. The standard rate of IPT – or the tax paid each time an insurance policy is bought – is rising from 6% to 9.5% from Sunday 1 November, which means that from then on, almost every policy you purchase will have a higher amount of tax levied on it.

According to figures from the Association of British Insurers (ABI), this change will affect 7.3 million car insurance policies, 4.7 million household policies, 3 million pet insurance policies and another 3 million private medical insurance policies, so chances are, you'll notice the difference.

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